Stefan Ried's Blog

Software AG today announced its cloud strategy. It is based on services that are already available, one that will soon be available (H2 2013), as well as a service planned for Q1 2014.

Journalists have already been in touch with me, asking the following question: Is this an overdue “coming out” after many competitors have already announced or offered extensive cloud strategies — or is this a courageous act from a leading technology firm demonstrating its strength in innovation?

I've known Software AG quite well for many years and believe that today’s announcement marks the next stage in a 10-year corporate turnaround strategy. I well remember the time before Karl-Heinz Streibich took over a nearly bankrupt software vendor 10 years ago. Since then, the firm has been through a financial stabilization phase, which saw both a spending and innovation freeze in many areas. Then, Software AG started to renovate its existing products to stabilize its market share, innovating both carefully and cost-effectively. The third phase saw its acquisition of webMethods and IDS Scheer, which brought the firm sufficient scale in both current products and consulting services. For more details, see my earlier blog post.

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Prior to its annual Sapphire event next week, SAP today announced the new SAP HANA Enterprise Cloud. As I have followed SAP’s platform and cloud strategy for years and covered platform-as-a-service (PaaS) in general for Forrester since the beginning, I’d like to quickly share my point of view:

PLUS

SAP is targeting the very large enterprise market with the Hana Enterprise Cloud.

Vishal pointed out today that some of the largest SAP customers run SAP systems on their premises that, with a single tenant, are far bigger than many of the native SaaS apps – with all of their tenants. All SAP products are available on Amazon’s AWS; however, many SAP customers use it just for dev, test, and disaster recovery. SAP's message is based on the trust relationship it has by combining an ISV and managed service provider in one company. Amazon won't care about any of the issues that customers might have with larger HANA systems on their general-purpose hardware. So, we are talking about a trust relationship between customers and SAP, which is more similar to salesforce.com than to Amazon.

MINUS

Half-baked business model

The Hana Cloud is a very careful move to a new business model. It is not disruptive and will NOT accelerate Hana usage to the many more customers who have been struggling with Hana on-premises because of its licensing.